Centuria buys into St Kilda Road

Centuria Property Funds has bought an office building on Melbourne’s St Kilda Road for $58 million.

The property, 441 St Kilda Road, was bought on behalf of the Over Fifty Guardian Friendly Society which is increasing its property allocation. The vendor is the AXA Wholesale Australian Property Fund, one of the country’s largest direct retail property funds.

In November, AMP Capital took over the management of the $760 million fund which has been frozen since 2008.

AMP plans to sell more than $220 million worth of property to increase liquidity ahead of reopening the fund.

The St Kilda Road property is an A-grade office building of 16,175 square metres with relatively large floor plates of more than 1500 square metres and a generous 340 car spaces.

The building is being upgraded with the work expected to lift the environmental performance to a 4.5-star NABERS rating and improve efficiency.

Tenants include Hutchison 3G, SAP Australia and Kellogg Brown Root but the income has not been disclosed.

“This will be reinforced by a significant upgrade to the property’s services including air-conditioning, building management system, new lift controllers, refurbishment of the lift cars and the completion of the toilet upgrades."

Many tenants quit St Kilda Road in the past decade pushing up the vacancy and opening the way for more residential projects.

But vacancy dropped in the last half, to 10.8 per cent, as the remaining offices found tenants.

Centuria has just reworked another building on the strip, 607 St Kilda Road, with a major services upgrade and refurbishment to the space.

Mr Huljich said the building was now 100 per cent occupied and would be sold to show strong gains for the investors.

Expressions of interest closed last week with Colliers and Knight Frank.